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Blackstone Minerals Limited's (ASX:BSX) Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Blackstone Minerals Limited's (ASX:BSX) future prospects. Blackstone Minerals Limited engages in the exploration and development of mineral properties. On 30 June 2022, the AU$83m market-cap company posted a loss of AU$32m for its most recent financial year. As path to profitability is the topic on Blackstone Minerals' investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Blackstone Minerals

According to some industry analysts covering Blackstone Minerals, breakeven is near. They anticipate the company to incur a final loss in 2024, before generating positive profits of AU$204m in 2025. The company is therefore projected to breakeven around 2 years from now. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 75% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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We're not going to go through company-specific developments for Blackstone Minerals given that this is a high-level summary, but, take into account that generally a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

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Before we wrap up, there’s one aspect worth mentioning. Blackstone Minerals currently has no debt on its balance sheet, which is rare for a loss-making metals and mining company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Blackstone Minerals to cover in one brief article, but the key fundamentals for the company can all be found in one place – Blackstone Minerals' company page on Simply Wall St. We've also put together a list of essential aspects you should look at:

  1. Historical Track Record: What has Blackstone Minerals' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Blackstone Minerals' board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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